The Complete Guide to Buying Real Estate in Aruba: Your Step-by-Step Process

Welcome to JZ Realty, your trusted partner in navigating the exciting and diverse real estate market of Aruba. Whether you’re looking for a vacation home, investment property, or relocating to this tropical paradise, this guide will walk you through the complete process of buying real estate in Aruba, from finding the perfect property to understanding taxes and financing options.

Aruba is a beautiful destination with a growing real estate market, offering a range of options for both residents and non-residents. Let’s dive into the essential steps of buying property in Aruba and how JZ Realty can assist you at every stage of the process.

1. Finding the Right Property

The first step in your real estate journey is identifying the property that best suits your needs and goals. Whether you’re searching for a beachfront villa, a cozy condo, or a spacious family home, Aruba offers a variety of options.

• Consider Your Needs: Think about the location, size, and type of property that meets your personal or investment needs.
• Budgeting: Define your budget to narrow down your options and make the selection process smoother.

JZ Realty provides comprehensive listings of properties across Aruba, ensuring that you have access to the best opportunities on the market.

2. Agreement on Purchase Price

Once you’ve found the property of your dreams, the next step is negotiating the purchase price. Here’s what you need to know:

Making an Offer

Your real estate agent will prepare and submit a formal written offer to the seller or their agent. In development projects, prices may be fixed, but there may still be room for negotiation.

Offer Acceptance

Once both the buyer and seller agree on the price, the formal agreement begins, and a contract is drafted for review and signing.

3. Compliance (Know Your Customer – KYC)

Before proceeding with any real estate transaction, Aruba law mandates compliance checks to ensure transparency and prevent illegal transactions. This process is known as Know Your Customer (KYC).

Required Documents

• Valid identification (passport or driver’s license)
• Proof of address (utility bill)
• Bank statements or proof of funds/pre-approved mortgage details

At JZ Realty, we partner with trusted compliance agencies such as Caribbean Identity to streamline this verification process, ensuring everything is in order for a smooth transaction.

4. The Contract

Once KYC compliance is verified, the next step is drafting the purchase agreement.

Drafting the Agreement

Your agent will prepare a contract detailing the terms of the sale, including the price, payment schedule, and any contingencies.

Review and Signing

After reviewing the terms, both parties will sign the agreement. The signed contract is then forwarded to the notary for processing.

5. The Role of the Notary in Real Estate Transactions

In Aruba, notaries play a crucial role in property transactions and are the only legal authorities allowed to finalize these deals.

Responsibilities of the Notary

• Due Diligence: Verifies that the property is free from any debts, liens, or unpaid taxes.
• Fund Management: Holds the funds in escrow until the transaction is complete.
• Compliance Checks: Ensures all necessary legal steps are followed before the ownership transfer.

Timeline

The notary process typically takes between 8 to 12 weeks, depending on the complexity of the transaction.

6. Ownership Transfer

Once the agreement is signed and all documents are in order, the ownership transfer takes place.

Initial Deposit

Buyers must deposit 10% of the property’s purchase price with the notary within 10 business days. This deposit is non-refundable unless otherwise specified.

Final Transfer

After completing all compliance checks, the notary will finalize the transfer of ownership to the buyer.

7. Understanding the Costs Involved

When buying property in Aruba, there are various costs to consider, aside from the property price. Here’s a breakdown of the key fees involved:

• Transfer Tax:
  • 3% for properties valued under AWG 250,000.
  • 6% for properties valued above AWG 250,000.
• Notary Fees:
  • Transfer Deed: 0.5% to 3% of the property value.
  • Mortgage Deed: 0.5% to 2% of the property value.
• Total Costs: Typically, you can expect closing costs to range from 5% to 8% of the property’s sale price.

8. Financing Your Property

Financing options vary based on your financial situation and whether you are a resident or a non-resident.

Cash Purchase

You can pay the full amount upfront for the property.

Local Financing

For local financing, buyers are typically required to make a 40% down payment. Mortgage interest rates in Aruba range from 5% to 7%.

International Financing

Non-residents can also explore refinancing options using properties in their home country to finance their Aruba purchase.

9. Taxes on Property in Aruba

Aruba has a land tax system that varies based on the value of the property.

• 0.0% for properties valued below AWG 120,000.
• 0.2% for properties valued between AWG 120,000 and AWG 250,000.
• 0.3% for properties valued between AWG 250,000 and AWG 500,000.
• 0.4% for properties valued between AWG 500,000 and AWG 750,000.
• 0.6% for properties valued above AWG 750,000.

10. Lease Land vs. Property Land

When purchasing property in Aruba, you may encounter two types of land ownership:

• Lease Land: The government owns the land, and you have a 60-year renewable lease.
• Property Land: Fully owned land that is transferred to the buyer.

Understanding the difference is crucial for ensuring your investment aligns with your long-term goals.

11. Key Considerations for Non-Residents

Aruba offers many opportunities for international buyers. Here are some key considerations for non-residents:

• Residency: Non-residents can own property and stay in Aruba for up to 180 days per year without needing a residency permit.
• Remote Transactions: If you’re unable to be in Aruba in person, you can authorize a notary or agent to complete the transaction on your behalf.

Conclusion

Buying real estate in Aruba is a fantastic investment opportunity, and with JZ Realty by your side, you can navigate the process with confidence. From finding the right property to understanding the legal and financial aspects, we are here to guide you every step of the way.

Ready to take the next step in your property journey? Contact us today, and let us help you find your dream property in Aruba.